Digital Platforms for Restructuring the Public Sector

Abstract

Many technological innovations have led to the emergence of the platform economy in recent years. This development is changing the entire landscape of business in the era of digitalisation. However, the impacts of the platform economy on public services and government are not well known. In this article we study the potential for the digital platform economy to help restructure the public sector. Firstly, central features of the new platform technology are explored, pointing to an algorithmic revolution, big data and cloud computing. Platforms are used in coordinating market transactions in an extremely efficient way. In order to apply the platform concept to the public sector, an experimental approach is needed; public platforms cannot be built by transposing mechanical models of the private sector to the public sector, because the market logic of public services is quite different than open markets. To illustrate the challenges and possibilities of the platform economy, we explored a few cases from Finland such as “Suomi.fi” digital service platform and its background technology, which is based on a national architecture for digital services developed in Finland applying X-Road technology created originally in Estonia. As a special case, we studied the Finnish solution to the digital health-care system. The case of “Kanta Services” exemplifies the challenge to simultaneously develop open and secure data systems for health care. Finally, we point out the importance of citizen-centred approaches in developing platforms for the public sector.